Good day and welcome to the ADNOC Distribution Q3 2023 Earnings call and Webcast. Today's conference is being recorded. At this time, I'll turn the conference over to Mr. Athmane Benzerroug. Please go ahead. Good afternoon, ladies and gentlemen, and welcome to ADNOC Distribution Q3 2023 Earnings Call. I'm Athmane Benzerroug, Chief Strategy, Transformation and Sustainability Officer. Joining me today, Bader Al Lamki, our CEO, and Wayne Beifus, our CFO. In today's call, I will start with the key highlights of the third quarter of 2023, and also speak about the company's outlook. Our CEO will then discuss in detail delivery of our growth strategy. Then our CFO will take you through the Q3 2023 operating and financial results. After the presentation, we will return to Q&A. Before we begin, I will quickly reiterate our cautionary statement regarding forward-looking statements. This presentation includes forward-looking statements relating to our business. Such statements involve a number of factors that could cause actual results to differ materially from our expectations. For more information, please refer to the international offering memorandum relating to our IPO and to our other investor communications, of which are available on our website. I direct everyone to our website to read the full text of this disclaimer and other important information. At the beginning of this call, I would like to outline the key highlights of our equity story. ADNOC Distribution has a strong record of value creation. Since IPO in 2017, the company has nearly doubled the value for its shareholders. This has been achieved through efficient capital allocation and value accretive investments, which have translated into a robust return on capital employed that exceeded 27% in the past five years. The company aims to pay a dividend of minimum $700 million for 2023, and minimum 75% of distributable profits thereafter, supported by the strong cash generation and robust balance sheet. As a part of our smart growth strategy, we are transforming the largest UAE fuel and convenience retail network into a destination of choice for our customers. We continue to focus on delivering incremental growth through allocation of capital towards mobility in a disciplined manner, future-proofing our business, and unlocking additional value from OpEx savings. In addition, we see growing contribution to operating and financial results from our international assets. Our track record of demonstrable, solid performance has been reinforced by strong results in the first nine months of 2023. The company is operating under a robust regulatory framework in the UAE and benefits from predictable industry-leading retail fuel margins, with a limited exposure to oil price volatility. This visibility was reinforced at the beginning of 2023, when we renewed the refined product supply agreement with ADNOC for the next five years term. This agreement offers us protection against inventory losses through a retail margin backstop guarantee, but provides an exposure to inventory gains. These strong fundamentals have enabled us to pursue new growth opportunities and continue with attractive dividend distributions. Our priority is to create incremental shareholder value, supported by tangible initiatives in sustainable mobility to future-proof the business and achieve leadership in sustainability. First of all, leveraging on our extensive network, we will continue to drive customer choice for EV charging on the go. As part of this strategy, we have installed over 40 fast charging points across our stations and expect to have about 50 charging points by the end of the year. In addition, E2GO, the mobility joint venture with TAQA, is intended to provide mobility and charging solutions in public and private sites across Abu Dhabi and the wider UAE. In terms of sustainability agenda, we are progressing on execution of our decarbonization roadmap. Our commitment to reduce carbon intensity of operations by 25% by 2030 is driven by a set of four key identified initiatives: energy optimization at our sites, installation of solar panels at service stations, use of biofuel to power our fleet of vehicles, and vehicle fleet management. We already started installation of the solar panels across our service station network in Dubai as part of the company's phased approach to the UAE-wide solar rollout. We have also adopted biofuel in 100% of our UAE heavy vehicle fleet. Looking at Q3 2023 key achievements and outlook for the remainder of the year. All figures in this presentation include contribution from our assets in Egypt, unless stated otherwise. Let me start with our key achievements. In Q3 2023, ADNOC Distribution recorded a 28% year-on-year increase in EBITDA to $303 million, and a 9% year-on-year increase in net profit to $227 million. One of the strongest quarterly results for the company since IPO. Our free cash flow of almost $400 million for the quarter and nearly $730 million for nine months supports our commitment to pay minimum $700 million dividend for the full year of 2023. The strong financial performance was driven by robust operating performance, with a double-digit growth in our fuel volumes and number of non-fuel transactions, and growing contribution from the international markets. Also, worth highlighting is that we achieved the highest convenience store conversion rate in three years, coupled with a larger basket size. This is a result of revitalization of our convenience stores, digitally enabled customer offering, improved category management with focus on F&B, as well as the expansion of our ADNOC Rewards loyalty program. Finally, we achieved like-for-like savings of $20 million in 9M, demonstrating significant progress towards our saving target of $25 million in 2023. Regarding the outlook, in line with our previously communicated guidance, we aim to add more stations over the fourth quarter of 2023, after opening 28 new stations in 9M, 2023. We also expect growth in non-fuel business to sustain, supported by our initiatives to drive higher footfall in our convenience stores, car wash and lube change. Our priority is to improve our non-fuel retail offerings by bringing a modern and engaging retail experience to our customers. Regarding our capital allocation, we expect CapEx in the range of $250 million-$300 million in 2023, after around $170 million invested in the first nine months of the year. With a focus on allocating capital towards sustainable growth, refurbishment of convenience stores and deploying EV charging points across our network. I will now hand over to our CEO, Bader Al Lamki, who will walk you through the delivery of our growth strategy. Thank you, Athmane, and good afternoon, good morning, everyone. Thank you for joining us today. Before I walk you through the progress we've made towards achieving our strategy, I want to talk about safety, which is at the heart of our operations. We treat the safety of our customers and employees with the utmost importance. In the nine months of 2023, we've continued to deliver an industry-leading safety performance through ownership by all our staff and continued investments in our facilities and staff training. Simply put, we strive for zero incidents and continually improve our safety performance. I'm also pleased to announce that we have been awarded with a WELL Health- Safety Rating for our entire network in the United Arab Emirates. This certification is a testament to the company's continued commitment to maintaining the highest level of health, healthy environment and safety practices for its staff and its customers. I would like to reiterate our commitment to continuously improving customer experience, operational efficiencies, and deliver on our transformational initiatives. These initiatives will position ADNOC Distribution service stations as destinations of choice through continuous focus on innovation and upgrading the customer experience, capitalizing on the opportunities offered by the energy transition to future-proof our business. Some of these initiatives include: improving product mix and bringing convenience stores to our customers, transforming car wash and lube change into a one-stop shop for car services, further driving efficiency program by maintaining leadership on cost metrics through technology integration and AI, investing in new mobility by advancing the rollout of EV fast charging points across our stations, and developing capabilities in alternative fuels, including hydrogen. Last but not least, implementing a range of sustainability initiatives to decarbonize our operation, as highlighted by Athmane earlier. ADNOC Rewards program continued to expand and has proven its popularity among customers. As at the end of third quarter, the number of members enrolled into the program exceeded 1.8 million members, demonstrating a growth of 14% year-on-year. The number of reward transactions also increased, doubling in the past two years. Under ADNOC Rewards Loyalty Program, over 100 partners are providing attractive offers to our loyalty members. The company continues to enhance on its customer value proposition and has recently launched a new system of ADNOC Rewards tiers: Silver, Gold, and Platinum. Each delivering an expanded suite of exciting benefits and offers to our customers. I will now walk you through the performance and the progress we have made towards achieving our growth plans. Starting with the fuel business, a key pillar of our growth strategy, we continued with the expansion of our network during the third quarter of 2023 and opened 12 new stations, after 16 stations were added in the first half of this year. As a result, we have already achieved our full year targets to open 25-35 stations in full, in the full year of 2023. ADNOC Distribution network now consists of 828 stations, including 67 stations in Kingdom of Saudi Arabia and 243 in Egypt. Our fuel volumes in United Arab Emirates and the Kingdom of Saudi Arabia increased to a double-digit rate, demonstrating year-on-year growth of 21%. Taking into consideration our operation in Egypt, the total volumes increase in the third quarter of 2023 was 54%. Our non-fuel business is the second pillar of our growth strategy. It has again demonstrated solid performance. In the third quarter of 2023, the number of non-fuel transactions increased by 14% year-on-year. This is a result of our constant focus on enhancing customer journey and loyalty through innovation, personalized rewarding experiences, and smart marketing in convenience stores, lube change, car wash, and in the vehicle inspection centers. We have also continued our convenience store refurbishment program and renovated 10 new stores in the third quarter, taking the total number of stores renovated since the launch of the program to almost 210. As a result, our convenience stores show an increased footfall and the highest conversion ratio in 3 years, supporting a growth of 19% in the non-fuel retail gross profit. I will now hand over to Wayne to present the highlights of our financial performance. Thanks, Bader. Good morning and good afternoon, everyone. In the third quarter of this year, ADNOC Distribution demonstrated strong operating performance. In the fuel business, UAE and KSA fuel volumes increased by 21% year-on-year, driven by ongoing initiatives to increase footfall, as well as higher mobility and growth in the wider economy. Our retail fuel volumes in the UAE and KSA increased by 15% year-on-year. We also continued to see significant growth in our commercial fuel volumes during the quarter, with an increase of 34% year-on-year. In the non-fuel business, we recorded double-digit growth with a solid 14% year-on-year increase in the number of transactions, leading to a significantly higher conversion rate. In particular, the convenience store conversion rate has increased by nearly 300 basis points, from 21% to 24% in Q3 2023. Now turning to key financial highlights. Supported by the strength of our operations, in Q3, we achieved significant growth in profitability, recording one of our strongest quarters since the IPO. In Q3 2023, our EBITDA increased by 28% year-on-year to $303 million. Adjusted for the effects of inventory movements, our underlying EBITDA increased by 16% year-on-year to $241 million. Our net profit attributable to equity holders increased by 9% to $227 million. Excluding inventory movements, the net profit was 8% down year-on-year to $165 million. In Q3 2022, the company changed accounting estimates related to the useful life of assets, which resulted in a $34 million reduction of the depreciation charge in the nine months to 2022, with the full impact of this in Q3 2022. Adjusted for the effect of the above change in accounting estimates in the prior numbers, our Q3 2023 net profit, excluding inventory movements, has increased by 11% year-on-year, despite the higher finance costs we are experiencing. I will now turn to our gross profit by operating segment. Q3 fuel retail gross profit increased by 25% year-on-year, driven by volume growth and positive impacts of inventory gains. In Q3, our retail segment inventory gains were $48 million, compared to $24 million in Q3 2022. Our commercial segment gross profit has increased by 51% year-on-year, driven by higher volumes and inventory gains, but partially offset by lower margins. Our non-fuel retail gross profit has increased by 19% year-on-year, driven by our continued focus on driving quality footfall through our customer-centric initiatives that we've rolled out. More specifically, in the convenience store segment, our gross profit was up 7% year-on-year. Now moving to operating expenses. We remain committed to achieving further operational excellence and expect to realize like-for-like OpEx savings of $25 million this year. This will be driven through operational efficiency across all business units, including optimizing our logistics, renegotiating supply contracts with vendors, the centralization of key functions, as well as payment standardization. In the nine months to 2023, our cash OpEx was flat, despite an increase of 7% in the company's network in the UAE and KSA, as well as the consolidation of TotalEnergies Marketing in Egypt. In the nine months in 2023, we have achieved like-for-like OpEx savings of $20 million, demonstrating significant progress towards our OpEx savings target for the year. Our Q3 EBITDA of $303 million increased by 28% year-on-year, which was mainly the result of volume growth, higher contribution of non-fuel retail and international activities, as well as efficiency improvement measured that I've already highlighted. It was also supported by the positive impact of the inventory gains. Retail EBITDA has increased by 26% year-on-year to $214 million, and the commercial segment EBITDA is 35% higher year-on-year, reaching $90 million. Excluding the impact of inventory gains, our Q3 underlying EBITDA has increased by 16% year-on-year to $241 million. Looking at cash generation, in the 9 months of 2023, the company has reported free cash of $727 million, supported by positive operating and financial performance. In line with our plans to continue the expansion strategy during the period, we have invested a further $180 million of CapEx. Our financial position remains strong, with a net debt to EBITDA ratio of 0.67 x, compared to 0.78 x at the beginning of the year. Despite making cash payments in February this year for a 50% stake in TotalEnergies Marketing in Egypt, our strong balance sheet and consistent, robust cash generation provides support towards future growth and shareholder distributions. I will now hand back to Bader for his closing remarks. Thank you, Wayne. Before opening the floor to Q&A, I would like to reiterate our outlook for the rest of 2023 and highlight the key priorities. We expect positive growth momentum to sustain during the remainder of 2023 and beyond, supported by growing contribution from our non-fuel retail and international operations. We remain focused on international expansion. Following the successful acquisition in Egypt, we are actively evaluating inorganic opportunities on international markets while targeting efficient capital allocation towards growth. ADNOC Distribution will pursue expansion plans in a disciplined manner, supported by a robust balance sheet and confidence in our cash flow generation capability. In our ongoing quest to future-proof our business, we are developing an EV charging infrastructure across our network in the United Arab Emirates, continue to explore further growth opportunities in mobility and lifestyle, as well as new revenue streams created through the energy transition. We aim to further optimize our operations to become a leading cost-efficient fuel retailer. Our initiatives have already resulted in a like-for-like OpEx saving of $20 million, and we are on track to deliver around $25 million saving in the full year. We are also placing sustainability at the core of our day-to-day operations, reducing carbon footprint and future-proofing our business. We remain committed to executing on a smart growth strategy, delivering an enhanced customer experience, and generating incremental value to our shareholders. This concludes today's presentation. We are happy to take your questions. Thank you. If you'd like to ask a question over the phone, please signal by pressing star one on your telephone keypad. If you are using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. A voice prompt on the phone line will indicate when your line is open. Please state your name before posing your question. Once again, press star one to ask a question. We'll pause for just a moment to allow everyone an opportunity to signal for questions. And we'll go to our first question. Hi, this is Faisal Al-Azmeh from Goldman Sachs, and congratulations on the strong set of numbers. I have three questions. Please, maybe starting off with strategy generally. You're about to reach your $1 billion target in terms of EBITDA for 2023. If you can shed some color in terms of how you're thinking about the next milestones, particularly, how do we-- how should we think about the EV opportunity? And maybe as well, if you can provide some color in terms of how you think about the Egyptian market. That's my first question. My second question is on the business metrics. Maybe just when looking at the corporate side of the business, your profitability per liter has gone down in Q3, meaningfully from where it was back in Q3 last year. Maybe if you can shed some color there and why margins have contracted on a per liter basis. And then finally, just been thinking about the volume growth that you've achieved in Q3, how should we think about Q4? And maybe, how should we think about next year as well? And this is just regarding the volume growth in the UAE and Saudi. Thank you very much. Okay. Let me take... Thank you for your question. Let me take the first question regarding the strategy for the next chapter of ADD and on EV. So I think we are very excited. We believe we are in a good place. We've been operating this business for 50 years, lot of experience. We are part of a transition whereby we have actually stand to benefit from the energy transition. We have a portfolio of more than 500 stations across the UAE. This presents an opportunity to have an additional service, an additional offering to our customers, EV customers, to pass by our stations, to charge, to get access to our convenience store, to provide them with an added value service through our car wash and other services. So, this is a philosophy we are developing, whereby the service station is no longer just a station, but rather a destination. We want to develop the service stations into destinations with additional value proposition to our customers. And today, we are quite excited that our loyalty program have seen an increased uptake, and today we have 1.8 million customers registered in our loyalty program. So I think this is definitely a value proposition and a loyalty from our customers. And we have already started this year building the capabilities internally. By the year end, we anticipate to have at least 50 charging points in strategic locations. It's not about the number, but it's the strategic positioning. Making sure that our EV customers also have a chance to charge within a radius of 80 kilometers. So this is strategic location, and we anticipate to continue to also expand on this and capitalize on the energy transition. As a company overall, the company is indeed best placed to continue its growth journey. Smart growth is what we are committed to. Responsible capital allocation is what we are committed to. And definitely, we anticipate that 2024 and beyond will be an exciting journey for us with the further momentum in growth and also driving cost efficiency. Of course, we'll be providing guidance in due course, and that's definitely what you'd expect from us as management. To the next question, I'll pass it to you, my colleagues. Thank you, Bader. I think let me just comment on the question about what we're thinking about Egypt. So it's nine months since our acquisition, where we've entered the joint venture together with Total in Egypt. It's a very positive start indeed. If we have a look at the performance of the ADNOC, specifically the ADNOC branded stations that are now in Cairo, they are showing positive growth. There are many opportunities that we've seen together with our JV partners there in Egypt, along the lines of some of the opportunities we're seeing emerging in the aviation space, as well as the lubes business. And I must say that, while there are clearly challenges in the market as well, one that comes to mind is the challenge around foreign exchange and potential devaluation that many, many people are talking about within the market. If we look at the strength of the business, to a large extent, the Egyptian business is naturally hedged, so that gives us positive confidence there as well. So certainly, Egypt is a part of our strategy, going forward, which we'll be sharing, at the appropriate time. And maybe if I could hand over to Athmane just to talk about the question on the commercial margins. Thank you, Wayne. Thank you. So why the commercial segment margins per liter are down this quarter and during the nine months? So the main reason is lower oil prices year-on-year, which had an impact on, first of all, lower margins in a competitive business, where we don't have guaranteed margins as in the retail business, as you know. The second reason is that the commercial fuel business is becoming highly competitive on the back of higher competition. But also, more importantly, is that last year, the commercial business benefited from around $50 million of inventory gains, while 9M 2023 had only $9 million of inventory gains in a less favorable price environment. Overall, I guess what is important is that the level of margins that we have even in Q3, for instance, and since the beginning of the year, are still healthy. I guess what we had last year in terms of inventory gains was quite exceptional. I would just highlight that the focus again on the corporate business is that we have been successfully being able to have to sell higher volumes, and this is coming from all the efforts that we have put in our system. The last question is on the outlook, so Q4 and 2024. As highlighted in our outlook section, look, I guess we are very positive on mobility. We still see in the past weeks good mobility within the UAE. And also the fact that we are gaining market share. The initiatives that we have put in place, especially on the non-fuel retail, through also this, the ADNOC Distribution app with today more than 1.8 million customers, is bringing clearly some additional stickiness into the customer. For 2024, again, the plan is to unveil a new strategy next year, to update our strategy for the next five years. And again, mobility is one of the critical themes, as highlighted by our CEO, and convenience. And I guess this is where ADNOC Distribution will create, along with additional OpEx savings, incremental value for shareholders. Thank you very much. We'll go to our next caller. Hi, thank you for taking my question, and congratulations on a brilliant set of numbers. Just a couple of things from my side. Maybe first on your Egypt business. Now, I think you guys have completed almost a year. Just trying to understand what the, you know, takeaways are from the Egypt business, what kind of synergies you guys have realized, and what should we be expecting in terms of synergies and in terms of focus? Will it be towards the aviation side, lubes or retail? How should we be seeing the overall Egypt business transforming over the next couple of years? And secondly, a little bit on your dividend policy. Now, I know this is probably something that keeps coming up, but we do see most of other ADNOC companies, especially with a stable business model, having a longer term, you know, dividend guidance, five years or so, and ADNOC Distribution also falls under a stable business model with growing volumes. How can we see, you know, the dividend policy changing? Are there any plans for a, let's say, a longer term guidance, medium to longer term guidance, and if there is something that the company is working on towards that? Thank you. Thank you for the question. I think let me first take the first part of the question to do with Egypt. And it's been nine months since we've entered the joint venture with Total. I think some of the key takeaways would really be the strength of the aviation business and the size of the opportunity in the lubes business, as well as the strength of the network. So the focus for us is going to first and foremost be on supporting our partners to maximize the potential of the aviation business that's already there. It's a strong business, it's a US dollar-denominated business, and it's a business that can grow substantially as tourism returns to Egypt and grows with the growth of tourism there. Secondly, I think it's worth commenting on the network. There's a focus on continuing to grow the network. There's already a strong network of over 240 stations. The ADNOC focus has been on the rebranding and the launch of the ADNOC brand within the Egyptian environment. It's been very well received, the stations that have already gone live, so we can see that journey continuing together with our partners. And we do see in terms of synergies, we see great synergies within the aviation segment as well as the lubes business. We've also launched the ADNOC Voyager brand within the network there, and that's got off to a positive start. So overall, it is still early days. It's nine months, but we do see the strength of Total and ADNOC coming together quite substantially within the market. To talk a little bit about your question on the dividends policy, I'm gonna hand over to Athmane. Yeah, thank, thank you very much, Wayne. So, so first of all, what is important to, to highlight is the fact that ADNOC Distribution remains confident to distribute to show the sustainable returns and dividends. And for this year, we have $700 million of dividend for 2023. And thereafter, minimum 75% of distributable income. As you have seen for the past two years, we have increased our dividends in the past years, and we have set for the past two years, minimum $700 million. What is important is that the company has today the very strong balance sheet. We have returned earnings of roughly $350 million, a net debt to EBITDA of 0.7 x, and also cash and cash equivalents of around $900 million, and this after making the payments, the cash payment for the 50% stake in TotalEnergies Egypt, and also paying in April the final 2022 dividend of $350 million. So we are confident about our dividend policy, and next year, anyway, there will be some updates. That's all from my side. Thank you so much. That's very helpful. Thank you. At this time, there are no further questions from the phone. Okay, so we have some questions from the net. Let us have a look at it just quickly. We have the first question: Could you please provide some color on the evolution of margins for Saudi operations and whether we could expect margin increases? Okay. I can take this one and perhaps Wayne, our CFO, can complement my answer if needed. In Saudi, we have more than 65 stations today, where our focus has been for the past one year and a half on rebranding. We have been, as you can see in our management discussion report, recording very high volume increase in Saudi Arabia. And you can see through the UAE and KSA disclosure, you can easily find that our volumes have increased substantially. And we have today rebranded most of the network, sorry. But there is still some upside in terms of volumes and profitability. Our focus as management is, of course, the quality of the station is driving the right footfall and optimizing the non-fuel retail portion. The question was also about the margins in Saudi. As you know, and what we have seen in the press, is that there are some articles talking about potential increase in margins in Saudi Arabia, which we believe will be good for the sector and of course, good for ADNOC Distribution. Saudi remains a priority for us. We're able to generate good returns there, and of course, given the proximity that we have with the Saudi market, we will continue to optimize the asset. Wayne, perhaps, do you want to add anything on the margins? Yeah. Thank you. Thanks, Athmane. The only thing I'd add there is there has been talk in the market for quite a while of margin increases. We can't speculate. We will continue to focus on the quality of our network. We'll continue to grow within the context of what we know. We're very pleased with the way that the business is progressing, and if margins come, when margins come, that's just added value to our business that's already doing well in Saudi. So the second question is also about Saudi, saying, can you please explain the company's growth strategy in Saudi and why ADNOC Distribution is slowly growing there? Yeah. So I already answered this question. So first of all, what we have done is making sure that we have the right network, first of all, the rebranding of the stations that are bringing us additional revenues and margins. Our strategy is clear that we will continue to improve the profitability and the growth in Saudi Arabia. We have the first question about the increase in depreciation. They are asking, what led to this increase? Okay. So the specific question is really around what's led to an increase in depreciation. I'm assuming the question is around the nine months versus the prior year. The key driver behind that is really two factors. First, first and foremost, is we are consolidating the Egyptian joint venture, which we financially control. So we've consolidated 100% of Egypt's depreciation into the numbers. That's obviously not in the comparator, given that the date of that acquisition is from February this year. And the second comment is, our network continues to expand. So the network within the UAE is now almost 40 stations higher versus the 12-month period, of which 28 stations have been added this year. So those are the two driving factors, and I trust that clarifies on the depreciation. Do we have any further questions? There are no further questions from the phones. Okay. So thank you very much for attending, this call. And, of course, the investor relation team and the management are available for any further questions. Thank you very much. Have a nice day. This does conclude today's conference. We thank you for your participation.